Acquisition Expected to Be Immediately Accretive to Gross Margin, EBITDA, Earnings Per Share and Free Cash Flow
BOISE, Idaho, Dec, 2015 (GLOBE NEWSWIRE) — Micron Technology, Inc. (NASDAQ:MU) and Inotera Memories today announced the signing of an agreement for Micron to acquire Inotera’s remaining shares for consideration worth 30 New Taiwan Dollars per share or approximately $0.92 USD per share. Micron currently owns approximately 33 percent of Inotera. This represents a transaction value of approximately $3.2 billion, net of cash and debt at Inotera, to acquire the remaining equity.
“We believe this is a compelling combination for both companies’ shareholders and employees,” said Micron CEO Mark Durcan. “The acquisition is the culmination of a highly successful seven year partnership with Inotera. It enables Micron to realize the full financial and operational benefit of Inotera’s operations and provides a strong future for Inotera and its employees, who will become an even more critical part of Micron’s success.”
Today, Micron purchases 100 percent of Inotera’s DRAM output, representing approximately 35 percent of Micron’s total DRAM production. Inotera is expected to be fully deployed on Micron’s leading-edge 20 nanometer technology by the middle of 2016. Inotera had net cash of approximately $0.9 billion U.S dollars as of its latest fiscal quarter ending September 30, 2015.
“Inotera and Micron have enjoyed a successful partnership for many years, and we are building on that success with this new agreement that provides Inotera and its employees an opportunity to become even more unified and aligned with Micron,” said Inotera Chairman Dr. Pei-Ing Lee.
Transaction Details:
Under terms of the agreement, Inotera shareholders will receive consideration worth 30 New Taiwan Dollars, equivalent to $0.92 USD per share, for each Inotera share. The agreement, which sets out the substantive terms of the transaction, provides an additional 60-day period for Micron and Inotera to agree on further mechanics and details of the transaction. Either party can terminate the transaction if these additional agreements are not reached within that timeframe or if certain other conditions to close are not met. Formosa Group Companies, including Nanya Technology Corporation, currently own approximately 32 percent of Inotera. Of this group, entities holding approximately 31 percent of Inotera are expected to enter into voting agreements in support of the transaction.
“The transaction significantly increases the scale of our cash flows with combined last twelve months EBITDA of approximately $7 billion,” said Micron CFO Ernie Maddock. “The enterprise value of approximately $3 billion for the remaining interest in Inotera not currently owned by Micron represents a purchase price of approximately 2.2 times Inotera’s last 12 months EBITDA. In addition to the cash flow benefits, this transaction is expected to have minimal impact to our overall leverage and Micron’s previously announced fiscal 2016 capital expenditures.”
Micron expects to finance the approximate $4 billion for the remaining equity ownership interest in Inotera with approximately $2.5 billion of debt, up to $1 billion of Micron equity to Nanya Technology and cash from Micron’s balance sheet. Micron can terminate the transaction if it is unable to secure the $2.5 billion of debt on satisfactory terms.
This transaction is subject to the completion of certain additional agreements, approval by Inotera shareholders, regulatory approvals and other customary closing conditions. The companies expect the transaction to close in the middle of 2016. Upon closing, Micron expects to record one-time acquisition related items.
